The spending plan approved by the Senate last week fails to extend President Bush’s tax cuts — and could lead to the largest tax increase in U.S. history.
“Make no mistake: This tax hike is gargantuan,” the Investor’s Business Daily states in an editorial.
“Simply by not making Bush’s tax cuts permanent, taxes will rise by a minimum of $2.8 trillion between now and 2018.”
The IBD says that if the tax cuts are allowed to expire in 2010:
Spending will rise by half a trillion dollars over the next five years. And the Democrats will pay for it by raising taxes by $683 billion — “the biggest such increase ever.”About 48 million married couples — “the heart of the middle class that Democrats say they want to help” — will see an average annual tax increase of $3,007. The tax bill for the elderly will rise $2,181 a year on average.A single parent with two children earning $30,000 a year will see a tax hike of $1,600.A family of four earning $50,000 a year will be hit with a tax increase of 191 percent.The 2009 budget for the first time ever spends $1 trillion on discretionary items — non-defense, non-entitlement.“This is a foretaste of future fiscal recklessness under a Barack Obama presidency (he voted for the bill),” the IBD observes.
Noting that the budget would weaken the economy and kill job growth, the IBD concludes: “This is supply-side economics in reverse — creating massive disincentives to work, save and invest, and shrinking the pie.”